The relationship between a company and their temporary
workers is unique to say the least. Let’s use Company ABC as an example.
Company ABC does not hire, fire, pay, or provide benefits for a temporary worker,
nor does their workers’ compensation policy provide coverage.
However, that temporary worker does perform job duties for Company ABC’s just like any other regular employee; they are required to follow the company’s policies; and they are exposed to the same safety protections/hazards as any other regular employee.
So where does OSHA stand on temporary workers? It all comes down to by whom the worker was supervised by when the injury occurred. If a worker who is employed by the staffing agency is injured while performing work duties for Company ABC, while under the supervision of Company ABC, the injury must be recorded on Company ABC’s OSHA 300 log (assuming there was treatment beyond first aide).
OSHA standard 1904.31(a) Covered Employees says:
“You must record on the OSHA 300 Log the recordable injuries
and illnesses of all employees on your payroll, whether they are labor,
executive, hourly, salary, part-time, seasonal, or migrant workers. You also must record the recordable
injuries and illnesses that occur to employees who are not on your payroll if
you supervise these employees on a day-to-day basis…”
It is also important to note that OSHA does not want the injury recorded on both companies’ log.
Doing so would skew industry wide statistics.
In the event that the temporary worker and company relationship is ended prior to full recovery of the injury, Company ABC must continue to count restricted and lost time days. How? The OSHA recordkeeping Handbook says on page 119 that the two employers have a shared responsibility and may share information when there is a need to do so, i.e. for workers’ compensation claims and for OSHA recordkeeping purposes.
It also states that the controlling employer (Company ABC) “must make reasonable efforts to acquire necessary information in order to satisfy Part 1904, but may be able to show that it is not feasible to comply with an OSHA recordkeeping requirement.”
Therefore, it is recommended that companies and staffing agencies keep record of communications, (and attempts to communicate if no response was received), regarding information needed to comply with OSHA recordkeeping requirements. This would serve as a defense if OSHA were to issue a citation for deficient entries.
When talking to employers about how a work comp loss time claim affects the experience modifier rate (mod), we are often asked, “can we just pay our employees when they are temporary totally disable from work instead of the insurance company to relieve the effects on the mod?” Let’s dig into that question. Spoiler alert: the answer is, It Doesn’t Pay to Pay!
First, I’ll briefly describe the mod. The mod is that state assigned number that drives how expensive a company’s workers’ compensation premiums are. Factors that impact the calculation of the mod include a company’s actual losses, payroll numbers and class codes, expected losses (both primary and excess), and other state determined industry rates. Among these factors the loss history is the main area a company can improve upon to achieve a lower mod, i.e., lower work comp premiums.
So what numbers are included in the loss
history? Generally speaking in Minnesota, for:
Lost time claims: total
amount spent plus total amount of reserves if the claim remains open.
Medical only claims: Total
amount spent on claims, plus the amount in reserves if the claim is still open.
Then reduce that by 70%…SEVENTY PERCENT!
That 70% reduction is huge and it is the
reason why we push so hard for employers to bring employees back to some form
of light duty ASAP.
If you are thinking to yourself, a few
lost time claims hitting the mod is easier and cheaper than paying an employee
for light duty, think again. The three complete years of loss history ending
one year prior to the effective date are included. So if the new rate is being calculated for
2019, the years 2015, 2016, and 2017 would be considered.
That means that one bad work claim would actually hit your mod for 3 consecutive years. It’s haunting and you could be paying more in the long run due to its effects on your mod.
Mod calculations aside, studies show
that employees who get back to some form of work sooner, recover faster. Speaking
from experience, once an employee has been taken off of work, it is harder to
get them released for any form of light duty.
It is also important to keep in mind
that the frequency of claims has a large impact on the mod. For example, many
minor claims could mean a higher mod than a few high dollar claims.
So back to that question, can the employer pay the lost wages instead of the insurance company. Well, it doesn’t pay, to pay. MN Statue 176.221 sub 9. Payment of full wages says:
“An employer who pays full wages to an injured employee is not relieved of the obligation for reporting the injury and making a liability determination…If the full wage is paid the employer’s insurer or self-insurer shall report the amount of this payment to the division and determine the portion which is temporary total compensation for purposes of administering this chapter and special compensation fund assessments.”
It goes on to say, “The employer shall
also make appropriate adjustments to the employee’s payroll records to assure
that the employee’s sick leave or the vacation time is not inappropriately
charged against the employee, and to assure the proper income tax treatment for
In other words, the lost wages the employer pays, still hits the mod and actually creates more work for the employer, (my sympathies go out to the payroll administrators who would have to deal with this). Failure to report the lost wages paid would result in a penalty.
Work comp attorney Mike Kilbury says, “from my perspective if done appropriately, there is more documentation required and there is virtually no potential for savings. I don’t see an upside to that.”
I hope you found this helpful. Thanks
Double Dipping: Self-funded/Self-insured Disability Plans and Workers’ Compensation
For those of you in Minnesota and whom have self-funded/self-insured disability plans, this blog is for you. Attorney firm Peterson, Logren & Kilbury, P.A. put together a short summary of the recent Minnesota Supreme Court decision regarding the case Bruton v. Smithfield Foods, Inc., 923 N. W. 2d 661 (Minn. 2019).
The dispute in this case was whether or not an employee, whose work comp claim was originally denied and then later accepted, should have been paid lost wages under workers’ compensation law for the time the employee was medically excused from work even though the employee had already been paid under the employer’s short term disability plan for the same time period.
The court found that since there was nothing under the workers’ compensation statues or within the employer’s short-term disability plan that allowed for an offset in this situation, the employee was able to receive benefits under both plans, i.e., the employee got to double dip!
The summary also notes that, “had the employer’s short term disability plan contained a claw back provision allowing for the repayment of short term disability benefits…they would have been able to seek a credit for the short term disability benefits paid.”
The law firm recommends that if your company has a self-funded short term disability and/or a self-funded long term disability plan you should amend your plans to provide that any payments made in short term/long term disability benefits is a credit against workers’ compensation payments in the event the two forms of payments coincide.
I hope this was helpful. Thanks for reading!
Click on the image to the left to read the Peterson, Logren, & Kilbury summary
The previous blog talked about reporting work injuries resulting in in-patient hospitalization to OSHA. Now that you realize just what in-patient hospitalization is, I am sure you will never forget that it needs to be reported, but do your supervisors know?
If an injury occurs at 11 pm on a Friday, the supervisor is likely the first one to know. They probably fill out the incident report and email it to you, your safety officer, or your human resource department who then finds it Monday morning. In most circumstances, this is fine but if the injury resulted in an in-patient hospitalization or other catastrophic injury, it should have been reported to OSHA within 24 hours of the event (8 hours if the work-related incident resulted in death). By Monday morning, it is already too late.
Now I am not saying that the supervisor should be responsible for reporting injuries to OSHA but they should at least know when an injury is significant enough to require a phone call to a manager or someone in your business who is responsible for reporting to OSHA.
I would suggest reviewing your company’s safety policy to confirm if notifying OSHA is included in the employee injury procedure plan. Many companies have a checklist for supervisors to complete when an injury occurs. One statement to add to the checklist is:
“Did the injury result in a death, in-patient hospitalization, amputation, or loss of an eye? If yes contact our safety officer, Joe Schmoe, immediately at the phone number provided.”
Then Joe Schmoe would have his own checklist to complete. Some information Joe Schmoe may like to keep in his catastrophic injury checklist is OSHA’s contact information. Some states have their own OSHA program so it is important to know if Joe Schmoe should report to federal OSHA or a state run OSHA program. There are some helpful links below if you are not sure what your state’s policy is.
The information OSHA would be looking for is:
(1) The establishment name; (2) The location of the work-related incident; (3) The time of the work-related incident; (4) Type of catastrophic event (i.e. fatality, in-patient hospitalization, amputation, loss of an eye); (5) The number of employees who suffered a catastrophic injury; (6) Names of said employees from #5; (7) A contact person for the company with a phone number; and (8) A brief description of the work-related incident.
Following the report, OSHA will determine if further investigation is necessary. There is a chance OSHA could show up unannounced so make sure those OSHA logs are up to date. By the way, OSHA requires logs to be maintained going back 5 years and may ask you for all 5 years’ worth when they show up. You only have 4 hours to hand over your OSHA records.
Welcome to WCMC’s blog where we share useful, employer
specific, news and information.
Most employers know, or at least have read at some point, that a work related death must be reported to OSHA within 8 hours of the incident causing the death. A work related incident causing an amputation, a loss of an eye, or in-patient hospitalization must be reported within 24 hours of the incident.
Okay…did you miss it? Almost every employer I talk to is surprised when I tell them that an in-patient hospitalization must be reported to OSHA directly, not just recorded on the 300 log, within 24 hours!
So what does “in-patient hospitalization” actually mean? Does that mean if an employee goes to the hospital, it has to be reported? Not necessarily. There is a difference between “in-patient” and “out-patient” hospitalization.
In-patient hospitalization it defined by OSHA in section 1904.39(b)(9) of the OSHA Laws & Regulations, (Standards – 29 CFR) as a formal admission to the in-patient service of a hospital or clinic for care or treatment. This usually means an overnight stay in the hospital. In an out-patient hospitalization however, the patient receives treatment and can then go home to recover. Many surgeries are considered out-patient procedures these days so do not assume that an employee who breaks an ankle due to a work incident, immediately requiring an ER visit and surgery, is an in-patient hospitalization.
One simple test I use to determine the type of hospitalization
is to ask the employee if they received a room number. If so, it was likely an in-patient stay.
Exceptions To The Rule
Now there is an exception. OSHA says that if the in-patient hospitalization, loss of an eye, or amputation occurs 24 hours after the work-related incident, it does not need to be reported to OSHA but must still be recorded on the OSHA 300 log, if your company is already required to keep such injury and illness records. So, if the employee in the example above required in-patient hospitalization due to complications with the injury a week after the incident, it does not need to be reported. If a work related death occurs more than 30 days after the actual incident, it no longer needs to be reported to OSHA but again, must be recorded on the 300 log in the death category.
Another exception. If the inpatient hospitalization only
involved observation or diagnostic testing with no actual treatment or care,
you do not have to report it to OSHA.